URGENT ACTION REQUIRED : The ridiculous Labour 'Private School VAT' scam ... Post Reply

[ronangel]

Contact labour candidate when announced and tell them you will not be voting for them if this is not withdrawn before the election.
Might be better after being also let down by the conservatives in so many ways to Vote for The Reform party
which seems to be picking up in popularity and has some good ideas.Vat on private schools not one of them!

[Tigger]

Whilst I totally disagree with the idea of swamping state school with 'ghost' state school applications, I do feel that the Labour policy is all about the optics of sledgehammering the rich to give to the poor.  They need to be careful what they wish for, as the top one per cent pay 30 per cent of all income tax revenues, a higher share than at any time in past twenty years. In other words, three in every ten pounds that the government receives in income tax is paid by just over 300,000 individuals.

I think that Cycling London makes some very valid and lucid points - we have two children in private secondary schools and between that and mortgage rates we are saving quite literally nothing each month - an additional 20% on top of the existing fees could very easily precipitate a move back to state education, and our local state school is already over-subscribed so we would end up having to go much further away for their education.

As for Daddyandpa's comment that "This money could go directly into improving classrooms, hiring more teachers, and providing better resources for all students", the critical work here is 'could', as in the same way that road tax actually pays to maintain the roads - it doesn't!!!  It goes into the government coffers to be spent on whatever they fancy.  I'd be far more sympathetic if they guaranteed to ringfence this money for actual schools.  Equally I don't understand how Labour are going to recruit overnight the additional 5,500 teachers that will then be needed for the state schools - another fatal flaw in their misguided plans.

If they are going to introduce VAT to school fees why don't they bring them in for all new starters from September 2025, or even phase them gradually by say, 2.5%  a year for the next eight years, at least that way people have time to prepare for it, or have the time to change their plans to go state rather than being smacked with an additional 20% bill overnight and having to take some very unpleasant decisions, especially for the children involved.

[justanothervotingscam]

I totally agree with Tiger... the issue with the lack of teachers is not money it is simply that there are not enough teachers !!! even the private schools are finding it hard to recruit teachers... because no one applies...

Labour is not magically going to find 6,500 people trained, ready to go and enthusiastic people to recruit. and again I agree with Tiger... Money attracts Money and the fund raised are unlikely to go where it is needed... even if it was going to education it would go to the already successful and oversubscribed schools it's how it has ever worked, sadly !

Finally, the whole education system is outdated and needs a total rethink and re-organization, putting more money on a broken system is not really going to help is it ?

GCSEs are outdated, as are A levels they do not prepare our children to the challenges of tomorrow, they do not prepare our children to build an inclusive, nurturing and efficient society for a better tomorrow.

[VitMac]

Even if they do find that much people, there are 24,000 state schools in the UK. How is 6500 teachers fix it all?

[Kitty123]

Not wishing to digress too much from the original topic but what’s everyone’s view on paying fees in advance?

We have 2 kids at different local independent secondaries and one has now offered the option to pay up front for next years fees before 4th July.

For those able financially - are you planning to do this? Appreciate it’s a gamble with so many unknowns but interested in the general consensus on it…

[Needcoffeenow]

The practice of holding a state school place as an insurance while applying for private places has been going on for a long time but Educationmatters' proposal would simply mean more children down for state schools starting reception in a really distressing situation. And speaking from experience, this is what happens.

You apply for your local state school and are told your child hasn't a place but is offered a school some distance away. Local parents whose children succeeded in getting a place at the local school confidently assert that places held by private school parents are given up around the time your child starts - so don't worry! Your child will probably be joining their children in a few weeks. You tell your child that although their best friends all got into the local school, they are going to go to a really nice school. It is a bit further away but you are sure the children will be just as friendly and they can still see their nursery and playgroup friends after school and at weekends. Your child does not understand this. You buy the school uniform. On that first morning take your child to the allotted school which is a considerable journey across the borough and they cry, having caught sight of numerous friends walking off happily to the local school with their parents. After a couple of weeks of this you are told they will have a place at their first choice school in three weeks. So you continue to arrange playdates with parents who have worked out you are not going to stay. Your child is not asked back. You then have to buy another uniform. When your child is about to start at the first choice school you have to explain (as best you can) that this school will be really lovely because that is where they know lots of children. Your child is suspicious. You have lost a great deal of sleep over this and your child has had a completely miserable start to their education. Is this what Educationmatters and others on this thread want? Surely they wouldn't have written these posts if they themselves had been on the receiving end of such unkind behaviour.  Nor, I feel, would Annabel have promoted them. 

[supergirl]

@ educationMatters

Instead of posting a ridiculous suggestion: frankly why would you want to ask people to email false demands is beyond me; you could ask your private school to allow the parents to pay ALL the fees leftover in full before the election so they cant charge you VAT.

Much simpler. Yes it means one’s got to be liquid but then that 20% savings and piece of mind. You could probably negotiate a % discount since you d be giving them an influx of cash…

Food for thoughts

[CyclingLondon]

you could ask your private school to allow the parents to pay ALL the fees leftover in full before the election so they cant charge you VAT.

I'm not an expert, or even an informed non-expert, on these matters but there is a tax lawyer on Twitter whom I follow called Dan Neidle. I suspect I'm probably one of the last people to discover him, but I find him fascinating on these matters.

His take is that there will be a lot less tax raised for reasons like you mention here, the fact that schools can claim VAT back etc. and that we'll see a lot of legitimate tax schemes used by schools to minimise this. 

For example, if the schools set up an off-shore company to hold their intellectual property which could include obvious stuff like the school brand (Eton, Harrow) but also could include lesson plans, lesson content etc.

Then the schools invoice the parents directly from abroad (without VAT as overseas) for these IP based services and the school only invoices directly (with VAT) for stuff in the UK.

Salaries, building costs etc. And many of these costs will have VAT as both input and output.

Now you've massively reduced the VAT aspect part of the fees.

Now I'm not saying this will reduce the bill to zero but there must be a lot of clever lawyers working on schemes just like this.

In the same way that Switzerland is the world's leading coffee exporter (big firms routing stuff via there) could the Cayman Islands become the independent school capital of the world?

I'm just thinking aloud but it's going to be interesting to see how all this plays out.

[Tigger]

I am absolutely no expert, but my understanding is that paying fees in advance will not work.

VAT is charged on 'luxury' goods and services.  In private schools, the payment for services are due each term and that is historically how fees have been charged.  As such therefore, the VAT element is crystalised each term.  Any fees paid in advance will simply be classed as a deposit, and then the fees still charged in advance for each term, so if and when VAT is added, it will still be chargeable on that term's fees.

The only way around this would be if you were to pay the fees in advance and make them non-refundable, which is never a good idea.

[readysteadycook]

I won’t now be voting for Rosena Allen-Khan this year.

[Waterbabe]

Unfortunately you won’t receive sympathy from many state school nappy valley folks because they are fortunate enough to live near some of the top state schools. We’ve been priced out of the nappy valley as a result and I imagine that is only going up from here with labours policy. Rich getting richer

[yogabunny]

I do not agree with the idea of flooding the local schools with false applications for all the reasons posted on here previously.

I would say however that this is such a straightforward case of unintended but entirely predictable consequences:

1. Add VAT to school fees.

2. The very wealthy people who can afford it keep their kids there and take it on the chin/tax plan it away. This increases the exclusivity of these schools and furthers the divide between have and have nots.

3. Those people who can no longer afford the fees remove their kids and enter the state system, putting a greater burden on the system as a whole.

4. The people referred to in 3 will pay for extra coaching, and use the money saved from not paying school fees to move to areas with the best state schools. This will raise house prices in these areas and squeeze affordability further for those on lower incomes.

5. The children of those adversely affected by 4 will then have no choice but to move to areas where house prices are cheaper and schools are likely not as high performing.

6. The children who used to go to private schools now dominate the attendees of the best performing state schools.

7. The very wealthy have experienced an increase of the exclusivity of the service they pay for, with little financial impact on them.

8. The children who previously would have benefitted from being able to attend a local high performing state school are now unable to do so and thus are disadvantaged where previously they would not have been.

It's wrong headed in the extreme and potentially a very costly political move for the Labour party.

[onthecommon]

Why is no-one who uses private education advocating that you all gang together and lobby your schools to either not pass on the increase to parents, slightly reduce the service to absorb costs and again not pass on the increase ?

If you actually look at the research  (not Daily Mail, Daily Telegraph or biased Infependent school research), it is expected that the impact will be a number moving their kids at primary level - at this level most Primary Schools (including Honeywell/ Belleville) have capacity due to falling roles and Brexit.  They will welcome these extra pupils and the funding that goes with it.  At secondary level as all are in exam mode they will not move, until perhaps 6th Form where there is again capacity.

NB only 1% of pupils at private schools receive a full means tested bursary or grant - they will not be impacted.  95% of parents whose children attend are in the top 4% of earners in the UK - so there will be little sympathy outside the Daily Mail / Telegraph echo chamber.  

[npvmum]

Belleville and Honeywell only have capacity in the upper years, for having a year 3 and been a parent there for many years I live it every day. belleville is absolutely bursting and over capacity, they are literally pushing the walls as it is now, there are always some leaving at the end of year 5 who are not replaced by incoming children.

and there is always movement at secondary schools at the end of year 7 and 8, agreed there is less so in year 9 and 10.

The Croydon schools have generous bursary schemes, not reflecting that 1% number your are quoting.

Those generalization are a little hasty

[readysteadycook]

The Secondary schools here are generally poor compared to the Private schools. Probably a reason why 23% of the children here are educated privately.

I think with Wandworth only having 1/3 of state schools as outstanding, some private school parents are going to have to think about moving.